These shoppers aren't worried about tariffs yet, but say they will be alert to possible price increases
Published in Business News
For the sake of his relationship, Chicagoan John Mendoza said, he needed to learn how to cook. So just before Thanksgiving, he went shopping for some major kitchen appliances.
With incoming President Donald Trump promising to impose tariffs on imported goods, economists say shoppers soon might be looking at higher prices on big-ticket items.
But that didn’t figure into Mendoza’s thinking — yet.
“I need an idiot-proof stove,” he said. “When you need an appliance, you need it. Obviously, price is a consideration. But if I had to pay more for American jobs, I would.”
Such was the sentiment among a recent sampling of shoppers at Abt Electronics in Glenview, Illinois, where many were looking for high-end products.
Co-owner John Abt said he’s already seeing a bump in holiday shopping because of sales, not the threat of tariffs.
“Every year, Black Friday creeps up a little earlier,” he said. “What used to be Black Friday weekend became Black Friday week. … Now, it’s almost Black Friday month.”
Customers have asked about tariffs, but Abt said it’s too early to tell what will be taxed and what effects it would have.
In the previous Trump administration, tariffs largely targeted China and certain industries, like steel, aluminum and solar panels, with exemptions for certain products. The Biden administration continued many of the tariffs.
This time, Trump has threatened to levy a 25% tax on all products from Canada and Mexico and an additional 10% tariff on goods from China on his first day in office, to halt what he called an “invasion” of drugs and illegal immigrants.
Trump also threatened a 100% tariff on countries including Russia and China if they try to undermine the American dollar.
Economists like Jose Vazquez at the University of Illinois Urbana-Champaign warn that such tactics could raise consumer prices for food as well as manufactured goods.
“People respond to incentives, so I would expect some consumers to hurry this winter season to purchase cars, house appliances, and other big-ticket items,” Vazquez said.
“If those tariffs do in fact materialize, we should expect big price increases next year as sellers try to pass most of the tariff to consumers.”
How much of the tariff sellers pass to consumers depends on the extent to which their products can be replaced by competitors. Vazquez said we should also expect prices to further increase as some sellers leave the market if tariffs are too high.
On the other hand, Vazquez added, some suppliers may try to incentivize “on the fence” consumers with discounts this winter.
The non-profit Tax Foundation estimates that more than $80 billion in Trump-Biden tariffs have been passed on to Americans, amounting to one of the largest tax increases in decades, and reducing domestic production and jobs. Advocates for tariffs argue that they are a long-term tool for encouraging domestic production and national security, negotiating more favorable terms with trading partners and preventing foreign countries from dumping cheap products into the U.S. to undercut the American market.
For all the outrage Americans have voiced over inflation recently, several high-end shoppers said they weren’t overly concerned about price hikes due to tariffs.
But for Chris Richards of Glenview, shopping for holiday gifts for his family, the uncertainty was a little unnerving.
“I’ve always been somebody that believes in capitalism and free trade, so the idea of a trade war terrifies me,” he said. “At the same time, living in a country with no manufacturing scares me just as much. So something has to be done, at least with China.”
Like others, Richards has mixed feelings about tariffs.
“I love buying products that are cheap, like everybody else,” he said, “but at the same time, we have to think about America too, so I’m not all one way or the other.”
For interior designer Jessica Margot, shopping for a kitchen with a client, inflation has meant consumers have shifted spending from buying new homes to renovating their current homes.
“Life’s gotten a lot more expensive,” she said. “We’re just going to have to see how it goes.”
©2024 Chicago Tribune. Visit at chicagotribune.com. Distributed by Tribune Content Agency, LLC.
Comments